Fact Check: Trump's tariffs could damage both the US and EU economies.

Published July 12, 2025

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VERDICT

True

# Fact Check: "Trump's tariffs could damage both the US and EU economies." ## What We Know The claim that "Trump's tariffs could damage both the US a...

Fact Check: "Trump's tariffs could damage both the US and EU economies."

What We Know

The claim that "Trump's tariffs could damage both the US and EU economies" is supported by various analyses of the economic impacts of tariffs implemented during his administration. According to the Budget Lab at Yale, the average effective tariff rate for consumers reached 17.6% in 2025, the highest since 1934. This increase in tariffs is projected to lead to a short-run price level rise of 1.7%, resulting in an average income loss of approximately $2,300 per household. Furthermore, the analysis indicates that US real GDP growth is expected to decline by 0.7 percentage points in 2025 due to these tariffs, with long-term effects persisting at a 0.4% reduction in GDP, equating to about $110 billion annually in 2024 dollars.

The impact on the EU economy is also significant. A report by Bruegel suggests that US exports to the EU could drop by as much as 66% if no trade deal is reached, while the EU's own economic output could suffer a long-term decline of around 0.4% of GDP, particularly affecting countries like Germany (Euronews). Additionally, a briefing from the European Parliament outlines the economic, financial, and monetary repercussions of US tariffs on the EU, emphasizing the challenges posed to the European Central Bank and the overall economic stability of EU member states (European Parliament).

Analysis

The evidence presented from multiple sources corroborates the claim that Trump's tariffs could negatively impact both the US and EU economies. The Budget Lab provides a detailed quantitative analysis of the tariffs' effects on household income and GDP, which is crucial for understanding the domestic implications. The credibility of this source is high, as it is affiliated with Yale University, a reputable institution known for its economic research.

On the EU side, the reports from Bruegel and the European Parliament offer insights into how US tariffs could lead to significant reductions in trade volumes and GDP. These sources are also credible, as Bruegel is a well-respected think tank focused on European economic policy, and the European Parliament is an official body of the EU.

However, some sources, such as a CNN article, argue that Trump's tariffs have not significantly harmed job growth or slowed the economy, suggesting a more nuanced view of the immediate effects. This perspective may stem from a focus on short-term economic indicators rather than the long-term projections emphasized by the Budget Lab and other analyses.

Overall, while there are varying interpretations of the immediate effects of tariffs, the long-term projections consistently indicate potential damage to both the US and EU economies.

Conclusion

Verdict: True
The claim that "Trump's tariffs could damage both the US and EU economies" is substantiated by credible economic analyses indicating significant negative impacts on GDP, household income, and trade volumes. The evidence from multiple reputable sources aligns in suggesting that the tariffs will have detrimental effects on both economies, particularly in the long run.

Sources

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